Chinese Unicorn XTransfer Expands in Hong Kong Amid Fintech Recovery
(Bloomberg) -- XTransfer, a cross-border transactions and financial risk management startup backed by D1 Capital Partners, is expanding in Hong Kong to lure merchants as China’s fintech companies emerge from a lull.
Most Read from Bloomberg
US Navy Challenges Beijing in South China Sea Amid Taiwan Drills
Apple’s 40% Plunge in PC Shipments Is Steepest Among Major Computer Makers
FedEx Overhaul Contemplates a Future With No Drivers on Payroll
Valued at more than $1 billion last year, the Shanghai-based firm will this month start providing Hong Kong merchants with payments services when they buy from mainland suppliers, it said in a statement. Registered in Hong Kong as Xtransfer Ltd., the company aims to attract about 300,000 small and medium-sized enterprise clients in the city.
XTransfer is expanding its client base beyond Chinese companies to diversify revenue sources. Fintech startups have had to hunker down in the past two years following regulatory tightening and a downturn in venture funding for the sector.
Setting up in Hong Kong is one of the first steps in the company’s global expansion. The value of trade imports from mainland China accounted for 49% of Hong Kong’s total last year, according to the Census and Statistics Department.
Due to compliance and regulations, cross-border transactions have become increasingly costly for small and medium-sized firms. XTransfer can reduce fees by 95% and exchange costs by 20% by setting up accounts with banks on behalf of clients collectively and providing anti-money laundering checks.
The company was co-founded in May 2017 by six former employees of Ant Group Co. and affiliate Alibaba Group Holding Ltd. XTransfer’s other backers include Yunqi Partners, Gaorong Capital, 01 Capital, eWTP Capital, Telstra Ventures, Mindworks Capital and Lavender Hill Capital Partners. It has served more than 300,000 small companies.
Most Read from Bloomberg Businessweek
What to Do With Your Money—and Your Life—in a Wild New World
Scaramucci’s SkyBridge Capital Was Spiraling, and Then Came FTX
The Chainsmokers Are Dancing Through the Silicon Valley Downturn
©2023 Bloomberg L.P.